In April 2024, Ballad Health raised pay rates for nursing staff across its 20 hospitals, benefiting more than 5,600 workers. Alan Levine, chairman and CEO of the Johnson City, Tenn.-based health system, spoke with Becker's Nov. 13 at the 12th Annual CEO + CFO Roundtable to discuss the effects of the pay raise.
Since the raises took effect, Ballad has seen its turnover rate improve to 13.8%, below pre-COVID levels. This is below the national average in turnover.
Nationally, the average turnover rate for registered nurses at hospitals is about 18%, according to Nursing Solutions' "2024 NSI National Health Care Retention & RN Staffing ReportNSI National Health Care Retention & RN Staffing Report."
While the turnover rate has improved, staffing challenges remain due to a limited pipeline of new RNs.
"We've hired more than planned over the last two years," Mr. Levine said. "And with the turnover being so low, we're making good gains. It's going to take us probably another year, year and a half to get back to a more comfortable area in terms of staffing."
To support retention, Ballad has focused on reducing reliance on contract labor and adjusting the responsibilities of nurse managers to emphasize coaching new nurses.
"It used to be with nursing turnover that people hit a certain age and wanted to retire or move to a different setting. Now, 50% of our nurse turnover is among people in their first two years," Mr. Levine said. "They're coming out of training — many of them during COVID — with limited hands-on experience. When they encounter high-acuity patients, it can be overwhelming. So we've done a lot to invest in bedside support for new nurses."
However, these efforts come with significant financial costs. Ballad expects to spend an annualized $90 million this year on contract nurses, with about 400 contract employees currently on staff. Additionally, workforce investments — including wage adjustments and the opening of childcare centers — have added $200 million to expenses.
Under the new pay initiative, starting pay for direct patient care RNs increased by 19% at Ballad's three tertiary facilities — Bristol (Tenn.) Regional Medical Center, Kingsport, Tenn.-based Holston Valley Medical Center, and Johnson City Medical Center/Niswonger Children's Hospital — from $27 to $32 per hour.
At Ballad's community hospitals, starting RN pay rose 25%, from $24 to $30 per hour. Other nursing roles, such as licensed practical nurses, nurse interns, nursing assistants, and behavioral health technicians, also saw wage increases.
To address pay compression, base wages were adjusted for other staff.
"It's not a windfall for Ballad," Mr. Levine noted, as the health system expects to recoup much of the $200 million through proposed rate adjustments under TennCare, the state's Medicaid program.